The venture was conceived to solve a problem of medical claims management for several Lebanese insurers in 1991, right after the country’s civil war ended. Today, GlobeMed Group has 800 employees, is active in 12 markets and is hungry for more.
The Beirut-based third-party administrator (TPA), known until last year as MedNet Liban in its home market, claims to be the region’s leading company in its field by a size margin of at least 30 or 40 percent over its nearest competitor.
“The GlobeMed Group manages around 2.2 million lives and we have grown 10 times in six years. Lebanon, Syria and Saudi Arabia are the three biggest markets of the group,” says Walid Hallassou, general manager of GlobeMed Lebanon.
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The TPA business model is a cross between healthcare and insurance. When Hallassou talks about “managing lives”, he refers to the insured who access medical services via a membership card. While it is not an insurance company, GlobeMed facilitates medical payments and patient benefits for these cardholders on behalf of its clients, which include private sector insurers, public sector entities and mutual associations or similar organizations that provide healthcare coverage.
An essential challenge for TPAs is to maximize cost efficiency of healthcare services for the insurers and the insured in a holistic way; that is, by doing more than just being an outsourcing and cost containment center for insurance companies that already employ bargaining power to control prices of medical services.
What’s in a name?
According to numbers that GlobeMed disclosed to Executive, the group provides its services to more than 80 client organizations and generated a turnover of $70-plus million in 2012. It manages more than $500 million in health insurance premiums across its operations, which include 10 countries in the Middle East and North Africa, plus Nigeria and the Ivory Coast.
GlobeMed rebranded itself on two levels in 2012. On the group level, it adopted a new logo and corporate motto to express the “spirit of the organization”, which Hallassou describes as oriented toward transparency, innovation, determination, openness and leadership in healthcare management services across the MENA region.
In parallel, the Lebanese brand was aligned to the group identity by changing the local name to GlobeMed Lebanon from MedNet Liban.
Underlying the rebranding was a corporate ambition to be understood as more than just paper pushers, Hallassou says. “We want to be perceived as an organization that is not only managing claims on behalf of insurance companies, but we want to make sure that the whole healthcare industry in the region becomes better in terms of standards and the balance between the cost of healthcare and the quality of healthcare.”
While the idea to go regional was born with the establishment of GlobeMed Ltd in 2001, Lebanon remained the group’s largest market for several more years and accounted for at least three quarters of the firm’s 200,000 cardholders in 2006.
Then, however, the invigoration of the Saudi market under a new insurance law in the middle of the past decade meant that some 30 new insurance providers were legally incorporated in the country. Many of the new insurers look to outsource their healthcare management to a TPA, and GlobeMed found a fertile field to the point that Saudi Arabia today is its largest market.
Home is where the hospital is
Another motor of the company’s business was the propensity of the Lebanese diaspora to seek medical treatment at home. GlobeMed saw the demand for cross-border services early on, Hallassou says, and equipped its products with the functionality of allowing cardholders to come back to Lebanon and have medical procedures done here within their regular medical insurance coverage, or at least benefit from not having to pay extra costs out-of-pocket.
According to Hallassou, GlobeMed’s cross-border capability also made the TPA attractive to regional insurance companies due to demand from Gulf-based employers to have region-wide medical coverage for their employees. “We therefore wanted to create this ‘borderless’ TPA to ensure that all countries from Morocco to Oman are covered by a service that is recognized everywhere,” he says. Hallassou cites Kuwait-based Gulf Insurance Co and Lebanon-headquartered Arabia and MetLife Alico, a unit of New York-based MetLife, as examples for multi-country insurance providers in MENA that use GlobeMed. On the other hand, insurers with large medical portfolios, such as Tawuniya, Bupa and MedGulf in Saudi Arabia, are not on the GlobeMed client roster.
Valuable relations
The third important component of GlobeMed’s success is its ability and preparedness to contract with state-owned provider organizations and insurance companies. This business model also sprang from the company’s dealings in Lebanon, where it has had to work with the mess that is the national healthcare system.
Having to manage under overlapping competencies, competing and inconsistent admission requirements, and fill holes in the service capabilities of private insurers and public providers alike, meant that this TPA service had to evolve into a versatile and flexible tool. It equipped the company so that it can assume responsibilities for a wide range of insurance-typical aspects of medical coverage, or step back from things like underwriting and relinquish these aspects of provision to the private or public entity that contracts GlobeMed.
In utilizing its versatility in service of public sector entities, the company has recently signed an agreement with the Dubai Health Authority in the United Arab Emirates by which it assists public hospitals in billing insurance companies; it also is a bidder for a state-aligned TPA contract in Qatar under the Supreme Council of Health.
But the most outstanding example of a successful implementation of a public sector partnership is found in Syria. GlobeMed has scored contracts with government entities that continue to perform to date even as the country is mired in crisis.
“We are still getting new clients and our claims are still coming in and we are paying the providers. Things are still working on a minimum basic level of normalcy,” Hallassou says of the Syrian operations. He explains this continuity as a result of the Damascus regime’s keenness to provide healthcare to its public sector employees in order to retain their loyalty.
Part of the group’s versatility is that GlobeMed offers its clients the settlement of claims in conjunction with specialized auxiliary services that range from cross-border settlement to calculating the premiums by its insurance mathematicians, or actuaries.
Optimistic about growth
In managing its expansion, the company used to move in what appeared to be mix of adapting to the needs of its shareholders and the strategy to cover the MENA region. In the initial thrust into the Saudi market and also in the out-of-area migration into Ivory Coast, GlobeMed followed its stakeholder Pharaon Group, the Lebanese conglomerate headed by Michel Pharaon that owns Libano-Suisse Insurance, along with stakes in Saudi and Ivorian insurers.
According to Hallassou, the current expansion priority is for weaving the still missing strands into the MENA blanket, where Iraq and Oman are the last two important markets in the Middle East and Morocco, Algeria, Tunisia and Libya are on the markets list for North Africa.
A second perspective for consideration is opportunistic expansion, into markets where senior management sees an opportunity and may pursue it on the basis of a feasibility study and an expected minimum addressable number of insured that GlobeMed could aim to manage in a country. These windows and areas of opportunity are far flung, with the company casting its eyes on central Europe and southeast Asia, but as yet are not developed into a specific expansion plan.
“We are also contemplating going to Turkey. All of these are not finalized. We have interlocutors with whom we are trying to understand the markets and determine if we will go there,” Hallassou says.
While the locations of GlobeMed’s future launches may not be certain yet, the ambitions for the number of managed lives are certain, Hallassou confides. “We should be able to double another time in the next couple of years. We should be around 4 to 4.5 million in the next two years.”
Previous expansion moves were implemented almost entirely by starting a new unit from scratch and acquiring the necessary licenses, but the company is also ready to move into markets by merger or acquisition. Wherever the company takes its expansion, it will reflect positively on its Lebanon operations. Here, GlobeMed has its most sophisticated operation, a strong human capital source, training resources and a market for implementing new products.
Headhunting headache
Lebanese talents with a knack for insurance and knowledge of healthcare, then, should have no worries about finding employment. Depending on the locations where GlobeMed will go, it will increase its headcount from the current 800 to 1,000 or 1,200 in the next few years, Hallassou estimates. Staffing this expansion will be the biggest mission for the company; in Hallassou’s perception, potential employees find working in insurance more enticing than third-party administration.
This is a bit of a menace, then, given that most insurance managers say they cannot find enough talent as graduates are chasing jobs of greater allure, such as banking and finance careers. GlobeMed, which has already some experience with providing qualification through a training program in medical coding, has plans for an “academy” to offer exploratory experiences with the company and qualification options toward a future career in TPA for the graduates it seeks. Finding human capital is the company’s paramount challenge and a supreme headache, Hallassou admits. “IT [information technology] is not, financial is not; the only challenge is human resources.”